OPENING CALLS:
| Class III Milk Futures: | 10 to 15 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | Mixed |
MILK:
Class III milk futures posted double-digit gains overnight. It has been some time since strength has been seen in the night market. The combination of stronger cheese prices on Wednesday and a friendly cold storage report provides support. Traders will be cautious as the market needs to prove itself before there could be an upswing in prices. Underlying cash prices will need to increase more than just one day or even a few days before traders would buy futures aggressively. The cash market will be the driver of the price direction.
CHEESE:
The cold storage report showed cheese stocks increasing as expected, but inventory remained below a year ago. This is supportive as the first five months of the year have not seen inventory build as much as had been anticipated, even though milk production was higher than a year ago. Inventory generally builds during the first half of the year and then declines through the end of the year. Cheese inventory may remain low the rest of the year.
BUTTER:
May butter inventory was 5% below a year ago. This may provide support for the spot market as buyers may become more aggressive, similar to the April report. Strong butter production had not been able to move supplies above a year ago over the past two months. Demand is steady to higher and may continue the pattern of lower stocks.
